Pages

Wednesday, 30 January 2013

Labour Used Virgin 'Restricted' Report to Open NHS to Healthcare Companies

A hitherto restricted report commissioned by
Labour back in 2000 has revealed how Virgin overstepped their remit – advice on
improving customer service in the NHS - by promoting an increase in the use of
private companies. Further inclusions written into the report by mystery
authors also reveal a fledgling policy idea that would later become part of
Virgin’s expansion into the healthcare market. The document also sheds light on
New Labour’s wider programme of marketising the NHS – the job the Coalition has
now seen to conclusion.

The document, which was meant to focus on customer service, extended into areas
of regional pay, consultant contracts and staff salaries, elements that would
later be included as part of Labour’s ‘NHS Plan’. Under Tony Blair, Labour
welcomed private companies into the NHS like never before, and in doing so
helped spawn a new organisation that would go on to be key to maintaining
competition in the recent Health and Social Care Act.

Now, with the Coalition’s Health & Social
Care Act 2012 hammered through parliament, the NHS is being fragmented at an
ever-increasing rate and some of those involved in handing out the new
contracts include the very same architects behind this previously unseen
report. Asking for Virgin’s helpIn 2000, the Labour party asked
Richard Branson’s Virgin to advise on how to make hospitals a more
user-friendly environment. Virgin, in the eyes of the Labour party, were a
standard-bearer for customer service which could teach the NHS a thing or two
about how to improve service quality.

Alan Milburn, the then
Secretary of State for Health who commissioned the report, explained his
decision to the BBC: "When people get into hospital they want to know that
the basics are right - that the wards are clean, the food is good, the care is
there. That is why I have now asked Sir Richard Branson's award-winning Virgin
Group to advise us on how hospitals can be made consumer-friendly."

Completed in June 2000 and titled, ‘Customer
Service in the NHS’, the report had a narrow remit to make recommendations on
various areas of customer service: ‘Staff training to improve customer focus;
systems for spreading best practice in customer service, guidance to improve
the environment in NHS building and staff roles and responsibilities.’

Yet despite the report focusing on the seemingly uncontentious area of customer
service, the Labour government chose to classify the report as ‘restricted.’ Now, following a FOI request made
by Keep Our NHS Public activist, Mr N Csergo, the document has been made public
for the very first time.

In order to carry out the task, a project team
was formed, made up of the questionable healthcare expertise of ‘a General
Manager of Cabin Services, Virgin Group Brand Quality Director’ and an
‘external consultant who has worked extensively with Virgin Atlantic.’

We do not know the exact identity of this team because their names have been
redacted from the document. However, it seems certain that whoever the authors
were, they had nothing to do with large parts of the report, which regularly
strayed from the customer service parameters into government policy with remarkable
accuracy.

Promoting private
interest
On page eleven of the report, under ‘A National Hospital Building Plan’, it
says: ‘New buildings provide a great rallying point for beleaguered staff and
dissatisfied customers.’ There should, it states, be ‘a number of specialist hospitals concentrating
solely on elective surgery, requiring 1 to 5 days stay. Private hospitals could
be utilised for part of this work.’

Providing advice on how to keep a patient happy is one thing; suggesting the
most effective way to carry out surgery for the UK population appears to be
quite another. In two parts of the report, the authors did make it clear when
it was beyond their remit. These areas included the issue of consultants’ pay,
which at that time was considered too low to encourage long-term retention of
quality staff. ‘A new contract for consultants is required. Not in our brief,
but on the face of it…Perhaps consultants should be given the choice of doing
private work only.’

Who wrote Appendix 4?A further recommendation made by
the ‘Virgin customer service team’ and which also overstepped their remit, was
considered important enough to be given its own appendix.

Under ‘Poly-Clinics (Combined GP Clinics and Day Surgery
Hospitals)’ Appendix 4
provided a detailed list on what these new health centres should look like. The
categories were listed as ‘Key characteristics’, what it ‘provides’, what it
‘must have’ and ‘costs and benefits’. In the latter category, the mystery
author informs us that a benefit of a Poly-Clinic is that it ‘offers choice for
patients. Including choosing to pay.’

Appendix 4 appears
to be the beginning of a new policy idea, and seven years later it was to
become one. But why was this included in the report? Virgin PR director Nick
Fox, suggested ‘Appendices were included for ease of reference.’ Maybe so, but
on the question of who wrote them and what have they to do with customer
service, Mr Fox was unable to explain further. ‘We have no more information and
there was no follow up from our side,’ he said when contacted for this article.

Whether it was Virgin or the Department of Health that introduced this appendix
is important because in 2007, Ara Darzi, Labour’s then Secretary of State for
Health, introduced Poly-Clinics as policy. The government ordered all 152
Primary Care Trusts in England
to have a GP-led centre, a third of which were run by private companies.

In 2008, Sir Richard Branson planned a network of Poly-Clinics in which GPs
would be given a percentage of the profits on top of their NHS salary. In the
2000 report under the heading ‘Staffing’ it says the idea of Poly-Clinics would
be ‘Attractive to entrepreneurial GPs’.

Then in early 2010, Virgin Care purchased a 75% stake in the healthcare arm of Assura and
took over their Poly-Clinics. The Poly-Clinic system collapsed, however,
following the Coalition government’s move towards “GP-led” commissioning.

Virgin denied they
had used the report to promote policy for a potential future revenue stream,
saying, ‘Virgin Atlantic and Virgin Group were asked by the Labour Government
thirteen years ago to provide practical suggestions to address a range of
issues flagged up by the Department of Health from the point of view of a
company with a reputation for providing excellent customer experience in the
travel industry.’

NHS Plan

A clue about who the report’s
architects might be comes from the authors of ‘The Plot Against the NHS’
written by ColinLeys, and
Stewart Player. In an article for Red Pepper they inform us how a Dr Penny Dash
‘was appointed head of strategy and planning in the Department of Health, and
co-authored the NHS Plan of 2000, which initiated the marketisation process.’
Later, Penny Dash joined McKinsey & Co as a partner, the global consultants
responsible for coming up with the £20 billion worth of savings the NHS is now
having to endure, and which was partly used to justify the need for the Health
& Social Care Act 2012. McKinsey, were also responsible for the financial modeling of Poly-Clinics, and
Penny Dash was involved in two Darzi reports when Sir Ara Darzi was Secretary
of State for Health. One of these reports promoted polyclinics in every part of
the country. Was it Dr Dash and the team who pushed for Appendix 4 to be
included in the Virgin report? Certainly her fingerprints are on the document.

Further possibilities of involvement in the development of Appendix 4 came from Simon Stevens. In 1997, Stevens became an adviser to Alan Milburn and co-authored the NHS Plan, which began in earnest the long-term plan to restructure the NHS towards a market. He went on to lead the European division of US health insurance giant Unitedhealth and then become the global president. In his film, Sicko, Michael Moore's accused them of routinely denying patients care who became critically ill.

With the content of the report under Labour’s
control, the media only wrote about the findings they were allowed to see. The
Guardian carried a piece that focused on the cleanliness of the hospitals with
the headline ‘Virgin team highlights NHS shambles’. The Telegraph reported that
‘NHS hospitals are ‘dirty and poorly run’. In an extensive interview with Peter Sissons on the BBC Breakfast show,
Alan Milburn had ample opportunity to mention the Poly-Clinics, but did not.
Nor did he mention other contentious points that were in the report, such as
‘flexibility in all clinical staff salaries to reflect regional differences’.

The dirty hospital stories made for uncomfortable reading, but not anything
that the media-savvy government couldn’t handle. Equally, it provided an
opportunity for the Labour party to bring in sweeping changes, part of which
was to introduce the regular use of private hospitals in order to reduce
waiting times.

One month following the June 2000 Virgin report, Labour launched the ‘NHS
plan’. Several of the key points announced by the Department of Health were taken
straight from the Virgin report. There was a need to ‘Create new roles and
responsibilities and better training for NHS nurses’, ‘new consultant
contracts’ and perhaps most controversially of all, to ‘Foster an agreement
between the NHS and the private sector for using private facilities’.

The move from using private hospitals in peak
times such as for winter flu epidemics, to a new permanent partnership had
begun. In October 2000, Alan Milburn signed an agreement
with the private healthcare representative organisation, the Independent
Healthcare Association. The concordant established a new deal, with a host of
measures that included setting up specialist diagnostic and treatment centres.

Independent Sector
Treatment Centres
The use of these specialist elective care units became Independent Sector
Treatment Centres (ISTCs). The ISTCs were key to providing an established
foothold for private companies in the NHS, some of whom went on to form a
private healthcare group called the NHS Partners Network (NHSPN).

The argument put forward by Andy Burnham’s team
is that Labour’s use of ISTCs was simply to bring down waiting times. In a debate on the use of the private sector in the Commons on
January 16th, 2012, Andy Burnham said, ‘We introduced the
Independent Sector Treatment Centre initiative to help reduce waiting times for
treatment at busy NHS hospitals while increasing patient choice.’ However in an
interview to the Guardian in 2005, Paul Corrigan, a member
of the 2000 strategy team alongside Penny Dash during the introduction of the
NHS Plan, suggested the use of private hospitals was part of a wider plan.
‘…the idea behind these independent sector treatment centres (ISTCs) was always
something much bigger. We were always looking beyond the capacity hump. We
never saw it as one big push and then waving goodbye to the private sector.’
The ISTCs, which are often located in NHS hospitals but run by private
companies, led to accusations by the British Medical Association of
‘fragmenting the NHS, cherry-picking of cheaper surgeries, and failing to
improve a quality of care.’ In 2007, a leaked document from the Health Care
Commission (HCC) raised serious questions over the quality standards within the
ISTCs, stating that the national data on the clinical quality of ISTCs was
“incomplete and of extremely poor quality”. The NHSPN, which was formed in
2005, had by this time been voted into the NHS confederation, the main
membership body of the NHS, offering them an increasing legitimacy.

They used this
platform to ensure that a report on the ISTCs was less critical than it
otherwise would have been. In the NHSPN annual 2007/08 report, they boasted: ‘Earlier in the year a leak of the
HCC document had resulted in some ill-informed criticism, but (the) NHSPN was
able to exert influence to make sure that the final version was a fairer
representation. This included submitting comments on the final draft, preparing
a response and devising a media handling strategy in advance of publication.’

The influence of the NHSPN and the private companies that make up their members
didn’t stop there, and in fact grew increasingly influential. In the same
2007/08 annual report they informed their members of how, in October 2007, they
had a ‘Meeting with Andrew Lansley on the Conservative Party’s draft bill.’
This ‘bill’ went on to become the infamous White paper, ‘Equity and
excellence: Liberating the NHS’, and in turn the Health and Social Care Act 2012.
The NHSPN used their influence to play a key role in maintaining competition in
the bill, by lobbying the Head of the Choice and Competition team of the
NHS Future Forum, Sir Stephen Bubb

Such was the farce
of the listening exercise that Sir Stephen Bubb, who was installed in his
position by David Cameron, admitted on his blog towards the end of the
period: ‘just as I was signing off our Panel's report on "
Delivering real choice" I get sent a copy of the PM speech announcing he
is accepting many of our key recommendations although we haven't actually given
him the report yet!’.

Revolving door
The expansion of elective care, as recommended in the Virgin report, also led
to increased opportunities for private companies, including NHSPN member, Care UK. In their
2011 Annual report for bondholders, a section under ‘capital
expenditure’ reveals just how beneficial the elective surgery programmes have
been. ‘Care UK
currently intends to finance all of its projected capital expenditure through a
combination of operating cash flows and the ISTC Wave I buyback proceeds,
totalling £54.0 million.’ In an article this year, the Guardian revealed how
the company intends to ‘increase the £190m a year it earns for delivering
healthcare services to NHS patients through 35 new contracts it has won under
AQP (Any Qualified Provider) to provide diagnostic services, elective surgery
and diagnosis treatment…’

Alan Milburn

It is worth noting
that the chairman of Care UK,
John Nash, gave £21,000 to run Andrew Lansley’s office when he was shadow
secretary for health. Furthermore, Alan Milburn, the commissioner of the Virgin
report, is the Chairman of the European advisory board for private equity
company, Bridgepoint. In 2010, they purchased Care UK for £414m. Alan Milburn has a
history, having worked as an advisor to Bridgepoint Capital between
March and September 2004, when he was an advisor. Six months after his
appointment, a subsidiary of the company won a £16 million NHS contract.

Despite repeated
requests to obtain a response regarding Alan Milburn’s role in the report,
cooperation from his Bridgepoint office has not been forthcoming.

A report, written by both Virgin and the Department
of Health included policies that had nothing to do with the customer service
remit. Labour turned many of the recommendations by the ‘cabin crew customer
service team’ into policy and a decade later Virgin bought out a company delivering
that very same policy. Now, two years later, Assura have been rebranded as
Virgin Care, who recently won a lucrative contract of £500 million to run
community services in two areas of Surrey.

In a recent speech
made at the healthcare think tank the King’s Fund, Labour’s shadow health
secretary Andy Burnham stated clearly that Labour would “repeal the Health and Social Care Act 2012 and the rules of the
market.” Mr Burnham described a skeleton idea for a more integrated NHS, and
offered an open invitation to “build a genuine alternative.” He said “I don’t
want to do the usual politician thing of pulling a policy out of the hat at the
time of the next manifesto that takes people by surprise.”
Certainly, they would do themselves no harm by accepting responsibility for the
part they played in marketising the NHS and admit that their policies cleared
the path for the Health and Social Care Act 2012. A move away from the market
will be welcome news to the many Labour voters who feel effectively
disenfranchised by their closeness with corporate interests in the Blair/Brown
years.

Furthermore, Labour will need to show that
underhand policy-making, written by unaccountable corporations on restricted documents,
no longer takes place. And while they are at it, they could turn their
attention to the 1 in 6 Labour Peers who have recent or current financial links to
companies involved in private healthcare.

5 comments:

As ive tweeted before You will be expected to provide your own private healthcare insurance by 2020, irrespective of which party/ies are "Governing" us. Compare what happened to the almost totally privatised Dutch Healthcare since 2006,[Wont be totally of course "small" matter of liability & indemnity, that will fall on who?] and all the players responsible for it, perhaps ex-union "Stalwart", ex Dutch p.m Wim Kok might be one of the starting points!

Certainly blind tribalism serves nobody any favours. Labour are yet to prove they are not a party of marketeers. In fact the list of Labour Lords with private healthcare interests suggests they are a party wedded to corporate rule. To rely on them and expect them to be the saviour is to ignore their recent history.

And looking at the situation in Europe, including the UK, the pattern is clear of so-called centre-left parties having abandoned their base and serving the corporations.

If Labour were to have the vision and ambition (if not even the integrity) to break out of this mould it would be excellent, but to take it for granted really means ignoring what is going on around us.